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Tad OMalley June 2005

Solution Id Length Case Author Case Publisher
2416 615 Words (3 Pages) G. Felda Hardymon, Josh Lerner, Ann Leamon Harvard Business School : 806078
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There is huge potential for growth, the company was behind approximately 6% the fragrance business, due to low par administration in authority. Empire could exploit this and could acquire 3F AG at a possible discount than its normal market value. And when the company is finally purchased, there are guaranteed chances of future growth and high revenue potential if managed well, as this sector is rising at a rapid pace.

Following questions are answered in this case study solution:

  1. I recommended an investment in 3F AG, because

  2. Concerns regarding 3F AG Investment

  3. Reasons to pass on Coming Home Funeral Services

  4. Reasons to pass on Yellowstone Cattle Bank (YCB)

Case Study Questions Answers

1. I recommended an investment in 3F AG, because

  • ​The potential for this industry will increase at an exponential rate, as the demand for fragrances never diminish. Customers use it for every single occasion, and fragrances are being used since the known human history.

  • Empire has also forecasted revenue to increase by almost 6%, operating profits to increase by 25%, and net profits by 60%, yearly. If the company is run with specialists and experts, there is a possibility of achieving better numbers than mentioned above.

  • It is also much easier to acquire bank loans, as many commercial banks have given the “green signal” to provide credit facilities at affordable rates. So, the company will also not face liquidity issues, at least at the inception stage, where it could try to build the foundation.

  • Moreover, Empire also has a lot of “exit” opportunities, if it feels that it is not able to run the company sustainably. The whole segment could be sold in the market and can also make use of initial public offerings or Leverage buyouts for effective exit strategies. 

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